What are the implications for charities of cancelling or pausing insurance during the coronavirus lockdown?

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Since the UK ‘lockdown’ was announced on 23 March, perhaps the most common question we have been asked by charities and voluntary organisations is: Can we cancel or pause our insurance cover while we are not operating?

If your organisation is not currently operating, or has had to switch focus to help during the coronavirus lockdown, then it may seem obvious to cancel or at least pause any policy that provides cover you don’t necessarily ‘need’ right now. However, there are some implications you need to consider before deciding to cancel your cover.

We have outlined some of the main considerations for different types of policy below, if you have any questions or need any further advice please don’t hesitate to get in touch or call us on 0330 013 0036.

Public Liability Insurance

Charities and voluntary organisations tend to work with people a lot, so Public Liability insurance is a must to provide cover against any accidents causing injury or property damage.

If your charity is still involved in any way with members of the public, then you need to keep your Public Liability insurance cover in place.

If your charity or voluntary organisation has completely ceased activity for the time being, then it is worth speaking to your insurer about pausing or even cancelling the Public Liability aspect of your policy. It is important to stress however, that your policy should be reactivated, or a new one taken out, as soon as you start operating again to make sure you are covered.

Find out more about Public Liability insurance for charities

Employers’ Liability

If your charity, voluntary organisation or community group employs staff then you are required by law to have an Employers’ Liability insurance policy in place. So although you may not be operating, or some of your staff may have been furloughed, you still need to have a valid Employers’ Liability policy in place.

This is because you always need cover in place in case a claim is made against your organisation by an employee or an ex-employee. This could be a claim for an injury they sustained while at work, or an illness they suffer as a result of their employment at your charity or organisation.

Find out more about Employers’ Liability insurance for charities

Trustee Indemnity Insurance

As Trustee Indemnity insurance is designed to protect your organisations trustee’s on an ongoing and continuous basis, it is important to keep your policy in place.

Trustee Indemnity insurance protects the trustees, and the organisation they represent, from claims arising from the decisions and actions taken by trustees. As claims of this nature can arise from any point in the past, charities and voluntary organisations with trustees should always have a valid Trustee Indemnity policy in place.

Find out more about Trustee Indemnity insurance

Professional Indemnity Insurance

Much like with Trustee Indemnity insurance, the key issue with Professional Indemnity insurance is the “retroactive date”. A retroactive date is the date from which you have held uninterrupted Professional Indemnity insurance cover. If you have held Professional Indemnity cover continuously with no breaks in cover, then your charity will be covered throughout that time period – even if you have changed your insurer.

If, however, there has been a period of time when your organisation has not held Professional Indemnity cover – for example if you cancelled your policy or did not renew it, then you will only be covered from the date you take out a new policy.

With Professional Indemnity insurance, you need to have had cover in place when the alleged incident occurred as well as when you are notified of the claim against you.

Find out more about Professional Indemnity Insurance for charities

About BHIB Charities Insurance

BHIB Charities Insurance specialise in providing tailored cover for community groups, clubs, societies, voluntary organisations and hobby or special interest groups. We offer more than just insurance and we are passionate about supporting local communities.

To find out how we can help your charity or not-for-profit organisation, email us on hello@bhibcharities.co.uk or call 0330 013 0036 to speak to our friendly, expert team.

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